As of March 2, 2026, the Pakistani government is intensifying its tax reform efforts in preparation for the crucial federal budget for 2026-27. Prime Minister Shehbaz Sharif has announced a relief package aimed at easing cost pressures on the industry, particularly for exporters. This includes a reduction in the Export Refinance Facility (ERF) rate by 300 basis points to 4.5% for new loans and rollovers, alongside a slash in electricity tariffs for industry by Rs4.04 per unit. These measures are part of a coordinated effort between the government, the State Bank of Pakistan, and commercial banks to improve cash flow for exporters and revive idle production capacity, although experts caution that these steps alone may not significantly boost exports without addressing broader competitiveness issues. Meanwhile, the Federal Board of Revenue (FBR) is pursuing super tax dues following a judicial ruling, complicating the tax landscape for businesses amidst a 51% drop in foreign direct investment (FDI) to USD 694 million in the first half of FY26 compared to the previous year.
BUSINESS
Pakistan Government Tax Reforms And Export Support Measures Announced
66% POSITIVE
Pakistan intensifies tax reforms ahead of the 2026-27 budget, with relief for exporters and efforts to boost investment amid security challenges and a significant drop in foreign direct investment.
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